Local Concerns are Walsh’s in Dealing with Wynn Casino

January 16, 2015
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One week after Boston filed a lawsuit against the Massachusetts Gaming Commission (MGC) regarding the Wynn Everett casino license, Boston Mayor Marty Walsh said in an interview that his administration is simply trying to protect the residents of Charlestown and that two continuing sticking points are mitigation and transportation.

However, Wynn Everett officials indicated that Boston is basing its expectations to protect Charlestown on the failed bid of Mohegan Sun – citing mitigation promises made in that bid that were unreasonable.

Wynn officials also dropped the bombshell that – minus property tax PILOT payments – Boston’s MGC-negotiated agreement is more lucrative than the host community of Everett.

There is a far different understanding of things in Boston City Hall.

“The reason discussions have …failed to produce results is there hasn’t been a meeting of the minds in what Boston feels it is due and what Wynn is willing to offer,” said Mayor Walsh in a meeting on Monday morning.

“The two major issues are transportation and community mitigation,” he continued.

Boston Corporate Counsel Gene O’Flaherty added that one of their last offers on the table was about $600,000 per year for Boston.

Walsh and O’Flaherty said that offer just wasn’t adequate to protect the residents of Charlestown, especially in light of the lucrative Mohegan Sun Surrounding Community Agreement (SCA) that treated Boston nearly as a Host Community – giving out $18 million in annual payments.

That is now a real sticking point for Boston and Wynn Everett – the old Mohegan Sun agreement.

O’Flaherty and Walsh said they made it clear that “there could be a meeting of the minds if they treated us as a Host Community, even if we weren’t one.”

That is what, in large part, Mayor Walsh said happened with Mohegan Sun, as that former proponent recognized that, despite being located in Revere, its casino would have dramatic impacts on Boston and East Boston.

Walsh said Mohegan Sun was willing to pay for things like improvements to Rt. 1A leading to its casino proposal in Revere, while Wynn – in negotiations with Boston – said it would only pay for interest on the debt incurred by the City in making expensive improvements to Sullivan Square and Rutherford Avenue.

That, Walsh said, was not going to cut it and didn’t protect Charlestown.

“Wynn was out there talking to the community about upgrades in Sullivan Square and Rutherford Avenue,” Walsh said. “They were out there talking to the community about improvements to the roadway, but they didn’t inform the community they expected the City of Boston to bear the brunt of paying for that. We asked them who was paying for [the improvements]. They told us they would pay the interest on our debt. They were setting us up – pitting us against the community.”

Wynn Everett officials had a dramatically different take on the situation, saying that Boston shouldn’t expect an agreement such as Mohegan Sun made – as it wasn’t sustainable.

“When Boston refused to negotiate a Surrounding Community Agreement, the Gaming Commission stepped into the void and proscribed a mitigation package of up to $76 million dollars,” said Michael Weaver, senior vice president of marketing for Wynn. “The current Boston Mitigation Package is potentially the largest mitigation package paid to any community, including Everett. The Mohegan Sun mitigation offer was financially unsustainable, which is among the reasons they were not selected for the license.”

While the Boston Mayor’s Office feels things aren’t what they  seem, Wynn Everett officials said there is a lot of misconceptions about their side as well.

Part of that misconception is on the payments to Boston/Charlestown.

Last week, Boston turned away a $1 million mitigation check from Wynn Everett, but that was only an initial payment required by the MGC-negotiated agreement.

Wynn contends that Boston would receive more in annual community mitigation payments than Everett – with, according to Wynn Everett, Boston getting $6.1 million per year and Everett getting $5.3 million per year.

Naturally, that excludes a large chunk of Everett’s annual payments, which involve a property tax PILOT program paying $20 million per year. However, Wynn Everett officials said it is fair to take that number out because the property is located in Everett.

In that way, Wynn Everett officials indicated that they are treating Boston as good, or better, than the Host Community.

Back at Mayor Walsh’s office, however, there is a sense that they have been left out of discussions, and Walsh said there is a sense that Wynn is trying to divide Charlestown. He said they did not feel it was appropriate for Wynn officials to be out talking with community groups and residents about mitigation monies outside of official negotiations.

“What was missing in the Community Mitigation discussions was the Mayor’s Office,” said Walsh. “What I’m hearing from some elected officials and community leaders is Wynn was having direct conversations with residents about mitigation for Charlestown…That’s not how you negotiate because everyone in Charlestown is looking for something different…This is the way Wynn has played the thing – it’s divide and conquer.”

Weaver – as well as some Charlestown residents who have started an informal working task force – counter that the MGC license required that Wynn begin working with Charlestown immediately. Having such a rocky relationship with the Mayor’s Office, many of the introductions and listening sessions had to be done on their own.

“The MGC made it clear in the licensing process that they expect us to be proactive in our communication to communities,” said Weaver. “We will fulfill that expectation and intend to update the community on our progress, and partner with it to ensure our impact is positive.”

Perhaps that means with or without the Walsh Administration.

Yet another issue for Charlestown is just how any potential mitigation monies would be distributed.

There has been some concern at the Charlestown Neighborhood Council (CNC) about just how such monies would be distributed. Some are concerned about how much influence City Hall might have over distributing the money. Others prefer the existing system whereby Big Dig mitigation money has gone to the BRA and then to the CNC for distribution.

Mayor Walsh indicated that, if mitigation monies were to come in for the casino, he wanted the money to go through City Hall to ensure that all of Charlestown would be able to voice needs.

O’Flaherty said there is an existing mechanism already established for Charlestown in distributing community monies, and that the community has been used to dealing with large inflows of mitigation money in the past. He indicated that, if any monies came from the casino, it should follow a similar pattern of arriving at City Hall and then working its way out to the community.

In summary, Walsh hinted, though, that if he had more time to ramp up to the casino issue – instead of having it dumped on his plate right after taking office – he would have handled discussions with Wynn differently, and that perhaps they wouldn’t be where they are now.

“If I had been mayor of Boston five years ago, I would have done things differently and would have had people from my administration talking to both sides and not just one side,” he said. “That put us at a competitive disadvantage. We came in and had no negotiations with anyone except Mohegan Sun…We inherited Mohegan Sun and actually made the pot better. There had been very little, if any, groundwork laid on Everett and Charlestown. We had no starting point and had to start from scratch.”

That, he added, came at a time when he and his entire staff were getting used to the office in the first year of his first term.

Sidebar –

The Massachusetts Gaming Commission (MGC) confirmed earlier this week that the $1 million check meant for Charlestown non-profits is sitting in an escrow account and cannot be cashed.

MGC Spokesperson Elaine Driscoll said the check from Wynn – an initial payment in the potentially $76 million mitigation deal worked out by the MGC – is made out to the City of Boston and, like any check, can only be cashed by the City of Boston.

No community groups will be able to petition for those funds until Boston claims the check.

“The Gaming Commission will hold the check made out to the City of Boston in escrow until the City is ready to claim it,” she said.